In the LOOP The Quarterly Newsletter for clients of Powers Financial Group
Wealth health check What you should be doing at every age
P2 Client corner
Doug rests easy after 30 years on the green
P3 John Cox comments How the PPS register will affect you
Rate cuts offer fresh start
Interest rates (1 January 2012 - 30 June 2012)
Primary producers wanting to expand, upgrade or buy into a partnership should take advantage of QRAA’s interest rate cuts to its First Start and Sustainability Loans. Fixed rates are down by about 1 per cent, from 1 January 2012 to 30 June 2012. Powers Agribusiness Director Murray Davis said it was the perfect opportunity for people to buy into the family farm, or for existing business owners to diversify their operations to achieve greater productivity. The First Start Loans can provide finance of up to $650,000 and are administered by QRAA
under the Queensland Government Primary Industry Productivity Enhancement Scheme. Murray said First Start and Sustainability Loans were a popular source of finance for eligible primary producers and those looking to purchase their own farm as they had no set up fees, no exit fees and no hidden costs. QRAA approved more than $201 million in First Start and Sustainability Loans in the period 2005/06 to 2010/11. ■■If you want help applying for a QRAA loan, phone Murray on 4995 6677.
1 year fixed 5.22% (down 0.95% from 6.17% as at 1 July 2011) 3 year fixed 5.06% (down 1.09% from 6.15% as at 1 July 2011) 5 year fixed 5.33% (down 0.97% from 6.30% as at 1 July 2011)
Remember: BAS dates
Your local AMP advisers
To assist us in helping you avoid late lodgement penalties and interest payable, please ensure you get your Business Activity Statement records in as soon as possible after the end of the month or quarter to allow us time for processing. If you have any questions phone us on 4995 6677.
Did you know that Marc McMahon and Dan McMillan of Powers Investment and Finance Services are authorised AMP and AXA advisers? They are also authorised representatives of OnePath, CommInsure and MLC. For advice on investment, life insurance or superannuation phone Marc or Dan on 4995 6655.
Wealth health check
Are you keeping your finances healthy by doing the right thing at the right time?
Accumulators (aged 25–45)
Builders/Pre-retirees (aged 45–65)
Start a monthly investment plan
Stay cash flow positive
• ‘Pay yourself first’ rather than create unrealistic budgets. • Salary sacrifice into super while other financial obligations are low and stop when current needs are more important. • Use any pay rises to fund your regular savings. • Be clear about what you’re saving for and the best structure and investment options for that.
• Reduce unnecessary spending. • Pay off the credit card, it’s probably costing you more than 15% pa interest. • Consider consolidating credit card debt into a personal loan and potentially paying less interest. If you do this, resist the temptation to accumulate more debt into your credit card.
Check out the government co-contribution
• If eligible you could get up to $1000 added to your super for free every year.
Consider using a mortgage offset account
• This could reduce your loan interest while giving you access to the cash if you need it. • Make sure you have sufficient death, disability and income protection insurance.
Retirees (aged 65+)
• Live within your means. • Reduce the mortgage and other non-deductible debt such as credit cards and personal loans. This may free up cash flow for other investment opportunities. • Consider part-time work for a non-working spouse.
Increase contributions to super
• At age 50, the concessional (pre-tax) contribution cap increases from $25,000 to $50,000.1 • Consider transferring non-super assets to super. You’ll need to take into account any capital gains tax on the transfer and the super rules covering what assets you can transfer.
Split income where possible to save tax
• Consider investing money in the name of the spouse who pays the lowest tax. • Consider splitting super contributions between spouses. Up to 85% of concessional contributions within the contribution cap, including Super Guarantee and salary sacrifice contributions, can be split.
Look into a pre-retirement pension if you’re aged 55 or more
• Consider salary sacrificing, and drawing down regular income from your super to replace the lost income – this saves tax and builds your super without affecting your cash flow. • Make sure you have sufficient death, disability and income protection insurance. Also consider taking out trauma insurance.
Ensure you don’t run out of money
• Understand your plan for spending in retirement – set a budget for essential expenses and additional lifestyle expenses and how you’ll fund each. • Ask yourself if you’ve invested your assets too conservatively – maintaining and growing your capital today can help you provide the income you’ll need in the future. • Consider whether you need to downsize your home. • Investigate how your income and assets affect your Centrelink benefits. Simple changes can help ensure that you maximise your total income. • Consider setting up investments to help grandchildren with education costs, a deposit on their first home or an investment nest egg. You’ll need to include this in your retirement spending or estate plan. • Think about aged care now. When the time comes, decisions often have to be made very quickly, so plan ahead for which care options you’d like to use and how they’ll be paid for.
Review your estate plan
• Consider a Non-Lapsing Death Benefit Nomination for your super or a reversionary beneficiary for your pension. • Ensure your Wills and enduring power are in order. The increased concessional contribution cap applies until 30 June 2012. However, the Government has indicated that it plans to permanently increase the concessional contribution cap to $50,000 for individuals who have total super balances below $500,000 and are 50 years old or over. This communication has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and you should seek advice from your financial adviser before making any investment decisions. 1
Source: Colonial First State
Down to business with Earl Stevens “Our job is to make sure you have your business well planned and structured.”
Property sales go against Christmas lull
Property transactions in Biloela and the surrounding region have gone against the Christmas lull trend, with a sound number of residential properties traded during this period. Commercial and rural sales have continued to be limited, however, if several properties that are currently under contract are completed, it will confirm the downward trend in value for average grazing properties in the region. We still believe stand-out blue ribbon properties will perform soundly, relative to the general market, but this is still significantly down from previous years. Some of this demand for quality properties is being driven by a small number of buyers who have sold their interests to mining companies. One sale of note during the recent period is that of a small 16ha rural residential property on the outskirts of Biloela, selling for $650,000 at auction. We have also noticed a pick up in the demand for rental properties in Moura, which had seen a large number of houses over the past 12 months remaining vacant. This increase in tenancy rates appears to be leading to a slight increase in investor demand in this resource community.
Getting the basics right is the secret to business success according to our new business consultant Dr Earl Stevens. Earl joined the Powers team late last year after an extensive career in sales, marketing, corporate development and general management, and has already been fundamental in presenting new growth opportunities to our business clients. Holding CEO and Managing Directing roles in the past, including chairmanship of both public and private listed companies, Earl is well aware of the pitfalls faced in an increasingly globalised and competitive marketplace. “Making sure the business basics are in place and then leveraging the growth opportunities is what so many of us fail to do,” he said. “Growth without constraints is a ‘business cancer’. “Our job is to make sure you have your business well planned and structured to meet your long term goals for you and your family, and all stakeholders.” Unlike other business consultancies, Powers business consulting can address areas of business and product development, all while understanding your business framework, timeframes and cost constraints.
POWERS NEWS Making life easier in Monto
We now have an after hours delivery slot in the Monto office. This slot can be used to drop off your books and other items even if the office is closed.
Ingrid makes welcome return Ingrid Maddox has joined the Powers Investment and Finance team as Para Planner and administration assistant. Some of you may remember Ingrid from when she worked at Powers three years ago as administration officer.
Baby news for Samm
Support accountant Samm Szelag-Bath and her husband Kerry welcomed Makailei Rose Bath into the world on February 21. Makailei is the first child for Samm and Kerry and weighed 7 pounds 2 ounces.
Jess graduates with top marks Accountant Jess Phelan has graduated from her Bachelor of Accounting with a GPA 6.292 (the highest possible GPA is 7). During her studies, Jess won an award for achieving the highest GPA in the subject of Financial Accounting.
Doug’s 30 years on the green something to celebrate Doug Anderson has been a client of Powers for 30 years but he’s better known for another role he held for three decades – greenkeeper of the Biloela Bowls Club. Before his retirement late last year, Doug was a regular sight on the bowling greens as he fertilized, mowed and top dressed his way to become one of the highest regarded greenkeepers in the state.
Powers director Geoff Arnold wishes Doug Anderson all the best for ‘retirement’.
He was once even referred to as the ‘best greenkeeper in regional Queensland’ by a leading greenkeeper in Brisbane. In his retirement, Doug has plenty of things to keep him active including his family, primary production block and other interests.
Can I claim my iPad? The ATO has recently confirmed that iPads are eligible to be claimed through the Federal Government’s Education Tax Refund. The iPad is to be treated as a type of laptop computer under the scheme. This allows taxpayers with primary or secondary school students to claim refunds of up to $397 or $794 respectively. Don’t forget that uniforms are also included as an education expense from 1 July 2011, so keep all your receipts. The education tax refund is available to those taxpayers eligible to Family Tax Benefit Part A (Centrelink). A deduction is also available for businesses or individuals using their iPad in a work-related capacity.
DIARY DATES March 21 Monthly Activity Statements due for February
April 6 Good Friday public holiday 8 Easter Monday public holiday 21 Monthly Activity Statements due for March 21 March Quarter PAYG instalment due (quarterly payers) 25 Anzac Day public holiday 28 Super guarantee contributions due for March Quarter 28 Activity Statements due for March Quarter (self-lodged) 28 March PAYG instalment due and deadline for variation of instalments (two instalment payers)
PPSR John Cox Senior Consultant
You may receive or have already received notices from your financier advising you of a new registration system for your finance facilities. This is called the Personal Property Securities Act (PPSA) which was introduced on 30 January 2012. Do not be concerned. The new register (PPSR) is a national registration system which replaces 40 different security registration systems throughout Australia (though not consistent from state to state). Gone are the days of “fixed and floating charges”, replaced by words like Purchase Money Security Interest “PMSI” or General Security Agreement. These changes won’t affect you as a borrower. Of greater importance are changes to your rights for priority where you provide goods under credit, hire equipment or store goods for greater than 90 days in another person’s premises. In each of these instances you need to register your interest in the goods on the PPS register or suffer the risk of losing priority or the right to retrieve the goods in the event your customer or landlord becomes insolvent.
Urgent notice to business owners
May 7 Labour Day public holiday 12 Activity Statements due for March Quarter (lodged through Powers) 15 Income tax returns due for lodgement 18 Callide Valley Show holiday 21 Monthly Activity Statements due for April 28 Fringe Benefits Tax Return - lodgement and payment
What does this mean for you?
1. You may need to devote a staff member to become familiar with the lodgement and registration system on the PPSR website. 2. Be aware that any error in registration will neutralise your priority in the event of your customer’s insolvency. 3. Register ongoing credit arrangements e.g. where you regularly sell to one particular customer. 4. Be aware that your competitors may utilise the register to access basic information about your major customers (this is a public fee for service database). There is a two year transition period to the new system, however with the benefit of hindsight, the earlier one registers, the greater the protection of your assets under the new system without having to protect yourself in court. ■■For advice on the changes and how they affect you contact John Cox, Ian Congram or your current Powers adviser.
www.powers.net.au firstname.lastname@example.org Biloela: 07 4995 6677 Brisbane: 07 3251 4444 Monto: 07 4166 1366 The information in this document is of a general nature and is provided for information purposes only. It does not take into account your particular objectives, financial situation or needs and should not be used as a substitute for independent advice from a qualified professional. Liability limited by a scheme approved under Professional Standards Legislation, except where financial services are provided by Authorised Representatives of Professional Investment Services Pty Ltd (PIS) AFSL 234951 ABN 11 074 608 558.